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Latin America focused on new investments

Aromatics, Business, Company Strategy, Economics, Fibre Intermediates, Olefins, Polyolefins, Projects, US
By John Richardson on 07-Nov-2011

By Malini Hariharan

The blog has been scanning ICIS news reports from the 31th Latin American Petrochemical Association (APLA) conference in Buenos Aires to gauge the mood at the event.

Participants appear to be sanguine despite the global economic turmoil with talk focused on upcoming investments.

Braskem is the forefront. Its joint-venture project with Idesa, Ethylene XXI, in Mexico is on track to start up in mid-2015.

Site preparation began last month, and the FEED (front-end engineering and design) work has nearly been completed, revealed Jose Luis Uriegas, CEO of Idesa.

Financing for the project is likely to be secured by Q1 2012.

The size of the project has increased slightly and cracker will now have a capacity of 1.05m tonnes/year, instead of the originally announced 1m tonnes/year.

Downstream production will comprise two high density polyethylene (HDPE) plants with capacities of 350,000 and 400,000 tonnes/year and one 300,000 tonne/year low density polyethylene (LDPE) plant.

In Brazil, Braskem has invited bids for technology and engineering work for a project at the Comperj refinery and petrochemicals complex in Rio de Janeiro.

The project includes a cracker and plants for PE, PP, styrene, ethylene glycol and paraxylene (PX). The plants are expected to start up between 2016 and 2018.

Braskem is also considering investing in a greenfield polyvinyl chloride (PVC) facility besides an ongoing expansion of an existing plant at Alagoas by 200,000 tonnes/year to 460,000 tonnes/year.

Companies are probably banking on continued economic growth in Latin America to absorb volumes. The International Monetary Fund (IMF) has predicted that Brazil, Mexico, Argentina and Venezuela will see growth of around 3.6% next year and that the region as a while will grow faster than the US and Europe.

Low per capita consumption of polymers also promises strong growth prospects. However, capacity build might be outpacing demand growth especially if new investments in neighbouring US are also taken into account.